Sales of U.S. existing homes rose in September, a sign cheaper borrowing costs are helping stabilize an industry that’s battling the headwinds of foreclosures and joblessness. Purchases increased 10% to a 4.53 million annual rate from 4.12 million in August, the National Association of Realtors said today. The month to month gain was the largest on record.
But September sales were still off 19.1% from a year ago. Economists had forecast sales would rise to a 4.3 million rate. The median price of a home was down 2.4% from a year ago to $171,700. That's also down 25.2% from its peak of $229,600 in August 2005. Prices were strongest in the Northeast, weakest in the West.
Distressed sales -- either of foreclosed homes or short sales -- were 35% of the market. At the current sales pace, it would take 10.7 months to sell those houses, compared with 12 months in August. Month’s supply would need to drop to eight to nine months in order to stabilize home prices, according to the NAR.
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